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Table 1 shows the distribution of market income in an economy. The government redistributes income by collecting income taxes and paying benefits shown in table
Table 1 shows the distribution of market income in an economy. The government redistributes income by collecting income taxes and paying benefits shown in table 2.
Table 1
House holds | Income (millions of dollars per year) |
Lowest 20% | 5 |
Second 20% | 10 |
Third 20% | 18 |
Fourth 20% | 28 |
Highest 20% | 39 |
Table 2
House holds | Income Tax (percent)
| Benefits (millions of Dollars) |
Lowest 20% | 0 | 10 |
Second 20% | 10 | 8 |
Third 20% | 18 | 3 |
Fourth 20% | 28 | 0 |
Highest 20% | 39 | 0 |
Calculate the income shares of each 20 percent of households after tax and benefits.
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